james22

Good question. I'm FI, so a lot of it is because I enjoy investing. But a) can never be too hedged against any market crash or black swan, and b) while returns diminish, I'm pretty sure more wealth will increase my happiness level - some experiences are simply expensive (track days, poker runs, $100 hamburgers, etc.). I'm willing to work several more years and take some investment risk for those experiences.

In the CNBC interview, Calabria spoke of ensuring the two were safe and sound before offering to investors as well as "we will be suggesting to Congress that Congress come in and do an explicit backstop that is limited, that is defined, that you know where the lines are, that you know who's covered, you know who's not." Don't know if he's certain global investors will buy based on his assurance (and capital level) alone, but don't think he'd allow Congress to keep the offer from being made.

What did you do, grab value line book and start in the 'F' section? It was the 1,245th page in the ten-bagger thread that finally convinced me.

FNMA @ $2.75 FMCC @ $2.65 FNMAS @ $12.25 FNCKJ @ 12.00

Or just one (of size). I'm hoping for an opportunity to recapitalize FNMA and FMCC. Don't expect they'd be allowed to invest more than $20B or so, but Buffett could ride off into the sunset if he was able to invest the entire required $135B+.

Thanks. I made the commons a 3% position today and I'll make the preferreds 5% Monday.

recap mechanics should trip you up since no one knows what the hell is coming. this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative. but then, ahab, you are a hunter for the big whale.... The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out. Or I'll go back to work... How big is "big," DR? And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain? Anyone?

All credit to miLucky for picking up on this. The Berkshire Chairman’s letter in the following year’s 2016 annual report made this comment about the General Re purchase: Unfortunately, I followed the GEICO purchase by foolishly using Berkshire stock – a boatload of stock – to buy General Reinsurance in late 1998. After some early problems, General Re has become a fine insurance operation that we prize. It was, nevertheless, a terrible mistake on my part to issue 272,200 shares of Berkshire in buying General Re, an act that increased our outstanding shares by a whopping 21.8%. My error caused Berkshire shareholders to give far more than they received (a practice that – despite the Biblical endorsement – is far from blessed when you are buying businesses). Here I defend my initial summary. • It was precisely the use of the “boatload” of Berkshire’s shares in the purchase of General Re that was so seminal and materially beneficial to Berkshire over the subsequent twenty years. • Yes, those shares would now be worth $83 billion at year-end 2018. But it was the purchase of General Re’s investment assets, namely its 90% allocation to fixed-income, that marked Berkshire’s pivot away from a massively overvalued stock market, from its own massively overvalued stock portfolio, which alone was 15% larger than Berkshire’s entire book value, and from its business concentration in property casualty insurance and reinsurance. • You might question the last part of that – the move from insurance, given that General Re, the acquiree, was, in fact, a reinsurer. • Yes, but it wasn’t so much the insurance operation that was attractive – it was the ability to purchase a $25 billion investment portfolio, overwhelmingly bonds, using a stock trading at three times book value when fair value was half as much. • It was the ability to shrink a stock portfolio from 115% of book value to only 69% and to do so by paying no capital gains taxes, then at a 35% corporate rate. • Did management at Berkshire anticipate two decades of subpar stock market returns? Did they recognize that at three times book they possessed overvalued currency? • An acknowledgment of that would suggest perhaps that Berkshire took advantage of General Re, and Berkshire would never utter that. https://boards.fool.com/21419-semper-augustus-recap-and-patience-34208583.aspx?sort=postdate More at the link.

Commodities? ...every recession in the U.S. since 1970 has been preceded by a massive commodity rally. Going into each of the last five recessions, commodities as an asset class have experienced a truly massive rallies, sometimes by as much as 400 percent. During those rallies commodities have vastly outperformed the stock market. Gundlach finds it almost unbelievable how repetitive commodity outperformance late in the business cycle has been historically. “Eerily repetitive” was his actual description. https://oilandgas-investments.com/2018/top-stories/30097/ Commodities have been hurt by the tariff talks and the slowdown in the global economy, Gundlach said. Commodities typically move higher prior to a recession. But he is less sure of this now, because it could be overwhelmed by broader variables like inflation. With a weaker dollar, commodities have a 50%-plus chance of making money, Gundlach said. https://www.advisorperspectives.com/articles/2019/01/08/gundlachs-forecast-for-2019

Yep.

Yeah, don't understand why people fear the share price dropping with Buffett's death when BRK itself would be buying if it fell.

:o

Buffett’s Berkshire Hathaway to invest $10 billion in Occidental Petroleum for Anadarko takeover https://www.cnbc.com/2019/04/30/buffetts-berkshire-hathaway-to-invest-10-billion-in-occidental-petroleum-for-anadarko-takeover.html $90B to go.

I guess I do too, as long as I'm buying shares. And/or Buffett is buying shares back. But at some point I'll be looking for share appreciation. And it's a little dishonest of Buffett unless he believes it. He is otherwise misleading shareholders as to Berkshire's prospects when he offers to buy their shares back.

But this is a value forum - shouldn't he be valuation timing it? Shifting away from any equities relative to their expected return? Are your equities indexed or in individual stocks, Eric? If the former, I'd make the switch today (believing the market overvalued and so the expected return not enough greater than bonds to justify the risk). If the latter, you might shift away first those with the least expected return.

It is Buffett playing avuncular, at his investor's expense. And it should be taken as inconsistent with his belief that's he taking advantage of a partner if he buys them out. I really look forward to his successor arguing BRK expects to outperform the S&P 500, without fear of being immodest.

Vanguard announced a couple weeks ago they'll be launching their CCF fund in June. https://pressroom.vanguard.com/news/Press-Release-VG-Announces-Plans-to-Launch-Commodities-Fund-04-04-19.html I've carved out 5% waiting for it.

Yeah, seems turning into Loews (run more for the benefit of the Tisch family than shareholders).

Nice, thanks.

BRK bought back $1.2B from an individual's estate in 2012. I don't remember anyone questioning the mutually beneficial logic then.

I don't doubt that BRK and BAM/OAK will fall with the expected larger correction. But believing they'll come out of it strenghened allows me to be more fully invested at a time of overvaluation than I otherwise would be. They hedge against the possibility of there being no correction too, of course.

Or go "anti-fragile" (BRK, BAM/OAK, etc.).

I do believe the market's expected return is very low, but it's how we get to no returns after a decade or two that matters. (I expect the market will correct by ~50% again before then.)

I use VEMAX (and VSIAX) because they are available in my 401k. I'd otherwise probably tilt my EM to Small and Value if I could. If had DFA access: DEMSX and DFEVX http://www.altruistfa.com/dfavanguard.htm Otherwise: https://www.bogleheads.org/forum/viewtopic.php?t=208687

More BRK.B @ $199